The term contact inhibition (CI) encompasses the cellular changes that result in cessation of cell migration and of proliferation due to signals transduced when one cell comes into physical contact with another cell. Cancer cells, however, do not contact inhibit. A molecular understanding of the loss of CI in cancer cells is important for understanding tumor progression. In this Perspective, we propose that the loss of CI observed in cancer cells is the result of extracellular proteolysis of transmembrane cell–cell cell adhesion molecules (CAM) in the tumor microenvironment. Proteolysis of homophilic cell–cell CAMs results in a shed extracellular fragment and released cytoplasmic fragment(s) that disrupts adhesion and induces signals that promote proliferation and/or migration. The importance of this observation in tumor progression is supported by the presence of the shed extracellular fragments of homophilic cell–cell CAMs in serum and tumor tissue of cancer patients suggesting that instead of acting as tumor suppressors, the shed CAM extracellular and cytoplasmic fragments actually function as oncogenes. The study of cell–cell CAM cleavage will provide important and novel means of diagnosing, imaging, and treating tumor progression. Cancer Res; 71(2); 303–9. ©2010 AACR.